Retail Sector in India

The Indian retail market is the 5th most attractive market in the world. The growth in the market is forecasted due to the vast middle class that prevails in India. The turnover of the retail sector in India is of about $510 billion. This figure is expected to grow by about 15 to 20 % in the next coming decade.

Unorganized v/s Organized

The retail industry is divided into organized and unorganized sectors. Over 12 million outlets operate in the country. Organized retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses. Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc.

Unorganized Retailing
In India, the most of the retail sector is unorganized. The retail business contributes around 12 percent of GDP. Of this, the organized retail sector accounts only for about 5 percent share, and the remaining share is contributed by the unorganized sector. The main challenge facing the organized sector is the competition from unorganized sector. Unorganized retailing refers to the traditional formats of low-cost retailing, The main advantage in unorganized retailing is consumer familiarity that runs from generation to generation. It is a low cost structure and they are mostly operated by owners, have very low real estate and labor costs and have low taxes to pay as compared to the organized sector.

Sahakari Bhandar-A Case Study

History and Introduction
Sahakari Bhandar a government supported co-operative was started in the year 1966. Sahakari Bhandar has about 20 retail stores in the Mumbai city. It can be said that Sahakari Bhandar has captured the whole Mumbai city for its retail operations. Though Sahakari Bhandar exists in the market for more than 40 years it has restricted its operations to Mumbai city only. Sahakari Bhandar was an traditional Indian state owned department store until sometime, in the year 2006 Reliance retail entered into a management agreement with Sahakari Bhandar. As Reliance being new to the retail sector it can make use of the expertise of SB. Thus Reliance has made the effort to make the old fashioned Sahakari Bhandar into a new modern store and it has being able to achieve it as well. The new department stores of Sahakari Bhandar are completely renovated and air conditioned their staff in a well dressed uniform. Sahakari Bhandar has over the years built its brand on affordability, offering marginal discounts on various products. along with a new tagline, "Sahi Quality Sahi Price". For the better understanding of the operation of the company I interviewed 50 customers and the executive of Sahakari Bhandar based on the information gathered through our research and our observation following thing were found.

Research methodology Sample size: - 100 Geography area: - Mumbai Locations of research:Store managers:Sahakari Bhandar, Juhu/ Vile-Parle / Breach Candy / Dadar.

Customers:Sahakari Bhandar, Agar Bazzar, Prabhadevi, Dadar (w). Method adopted:Simple average (Where the question answers which were identical are being segregated accordingly and average was taken on the scale of 100).

SWOT Analysis Strength

1. Technological innovations and product development capabilities 2. Leading market position garnered on strongbrand equity 3. Broad product portfolio encompassing awide spectrum of consumer electronics 4. Has a strong workforce of over 300,000 people 5. It is among the top five TV producers and top 20 semi-conductor manufacturers 6. The brand has excellent top of the mind presence due to advertising and sponsorship of events 7. It is one of the largest Japanese electronics producers, alongside Sony, Toshiba and Canon

Weakness
1. High leverage combined with revenues andprofits decline 2. The brand faces intense competiton from leaders and also faces trouble from fake replicas

Opportunity
1. Focus on eco-line products to drive future growth 2. Emerging markets of Asia and Latin America presents business expansion opportunities 3.Growth in semiconductor market

Threats
1. Intense competition 2. Rapid technological changes 3. Competition with black market, parallel import and smuggled goods

SWOT analysis Strengths

Brand image of the company is highly recognized Financial resources of the company Global Market leader in Plasma TVs, Growing economy of GDP =5% (2006) (as shown earlier in the table 1) Well technological advancement to offer high quality products Well suited for increasing market requirements for large screen TVs in digital
era

The reputation and reliability of the companys products will make it

possible for the company to market its products to a wide range of customers

Weakness

Weak currency of the country High uncertainty avoidance from consumers Lower communication level especially internet usage, hence using it as a
marketing tool not viable

Opportunities

Growing economy possible will enhance Panasonic customer purchasing

power

Easy to open and expand the network no major legal requirements Middle class and upper class citizen ready to buy new foreign products Panasonic can use the coming Olympic event in Asia (China) to promote its
Plasma televisions as there will be an increased need and increase sales in promotions.

Threats

Unstable political atmosphere may affect Panasonic business in Thailand Harsh competition, as almost all other electronic companies Most of the population is lower income earners and may have reduced
purchasing power

Television
First Research has found that TV advertisements has led the recovery in the US advertisement industry due to the large spending of companies on digital media for its products (Optimistic, 2010). This is largely due to the highly rated effectiveness of television advertisements. Please refer to the Appendix H to see the break down of cost of television advertising on different types of television networks. Essentially, the more people a station reaches the more expensive it costs. Also, when a station or particular program has certain popularity, the cost jumps up significantly. The most well known example of this is the Super Bowl. With over 11million viewers this last game, CBS was charging $3 million per 30 seconds (Super-bowl, 2011) (Sports, 2011).

Magazines
Magazine advertisements still capture a large portion of the advertisement industrys profits. With magazines such as Sports Illustrated reaching 3 million readers per issue, it is still

a very effective method of advertising (SI, 2010). The price of advertising in popular magazines such as Sports Illustrated, Playboy, or ESPN magazine is interesting. With these magazines reaching anywhere from two to three million readers per issue, magazines offer a very effective way to market to selected audiences. For I-conic, these particular magazines are perfect due to the audience that it aims to reach. Please refer to Appendix I for a table showing estimated average ad rate per magazine for a black and white ad, for Playboy, Sports Illustrated, and ESPN Magazine. Sports, cars, and sex sell most effectively to I-conics current target market.

Sales Promotions
Sales promotions can often determine the profitability of a product in the early stages of the product life cycle. I-conic Full HD 3DTVs are the perfect product to sell as a bundle to make the consumer feel like he is saving money. Aforementioned in the Industry Analysis section, many potential customers are deterred by the price of the 3D glasses, alone. I-conic is presently offering only one pair of 3D glasses with the purchase of a 3D television, totaling about $3600 as a package. In an attempt to increase sales, it would be highly beneficial for I-conic to begin including at least two pairs of glasses with any purchase of a 3D TV, as well as offer a limited time offer (2-3 weeks in length) including 2 pairs of glasses for free (see Appendix L). During the time period of the limited offer, I-conic would include three more pairs of glasses, at no extra cost, than any other given competitor in the market giving it a distinct competitive advantage. Essentially, a strategy of this nature is focused on market modification. Because 3D content, such as television shows and movies, is fairly scarce at the moment, I-conic made the right decision to include the Oscar-nominated film Avatar in previous retail bundles. However, it is time for a change. ESPN is one of the networks that has taken a serious interest in making 3D content readily available for consumers. After providing coverage of the 2010 World Cup in 3D, ESPNs senior vice president of research and sales development Artie Bulgrin believes that the event was a major success (Holmes, 2010). ESPN is now interested in providing 3D content in other sports such as college football, college basketball, and golf (Holmes, 2010). I-conic should work out a deal with ESPN and cable providers to include a 6 month free subscription to the ESPN 3D network with the purchase of a I-conic VIERA Full 3D HDTV (see Appendix M). This will increase the amount of content available to the customer while also appealing to the typical middle-aged white males (target market) interest in sports. Besides the use of advertising and sales promotion, I-conic will also use publicity and personal selling. It uses publicity in the sense that the new 3D TV has won awards such as the 2010 Best of CES (See Appendix N). CES is the Consumer Electronic Show held annually in Las Vegas. This kind of media is great for I-conic because not only is it free of cost to them but it comes from a neutral source unlike an advertisement which can be seen as more biased. Also, I-conic will issue a press release stating that it is having a 2-3 week special were it will include four pairs of glasses free with the purchase of a new 3D TV (see Appendix O). While it is too difficult for I-conic to implement personal selling to all of its customers across the globe, it still does control the people who sell the 3D TV to a certain degree. Since I-conic only sells its TVs

at reputable stores like Best Buy who have skilled salesmen who know they product they insure, not just anyone can sell TVs. This can lead to better sales because the salesmen can select their audience and are normally more persuasive when compared to other marketing tactics. I-conic wants the customer to see that the VT25 is an innovative product in every sense of the word. Upon seeing I-conics USP, the consumer knows that I-conic is trying to separate itself from the rest of its competitors. I-conic will be advertising in magazine, TV, and Internet ads. While advertising through these mediums may not be an innovative form of marketing the product, the actual content of the ads will show that the VT25 is an innovative product. I-conic will also be offering sales promotions that have yet to be seen in the market. With a limited time offer for four free pairs of glasses, I-conic is taking one of the most prevalent problems that consumers have with 3D TVs, the price of glasses, and being innovative to find a solution to that problem. In conclusion, the innovative qualities of the VT25 allow it to be one of the highest valued products currently offered in the market. As seen in the perceptual map, the innovative nature of the VT25 puts it in the lowest cost/highest value sector, essentially giving the VT25 perfect positioning amongst the competition.